Municipal debt to Eskom stands at almost R50 billion nationwide, with the Free State province topping the list of defaulters.<\/p>\n
Earlier this year, deputy president David Mabuza warned municipalities that total debt to Eskom surged by almost R5 billion in four months up to July 2022, which needs to be urgently addressed.<\/p>\n
This debt adds to the reasons cited for the power utility\u2019s struggle to meet South Africa\u2019s electricity demand, on top of the ailing infrastructure, poor management, and corruption.<\/p>\n
According to EskomsePush, South Africa has had 2104 hours (88 days) of load shedding this year alone. Independent analysis shows that individual households have been left in the dark for well over 450 hours – the worst on record by some margin.<\/p>\n
Eskom has around R400 billion of debt that it cannot service, relying on annual bailouts from the National Treasury to say afloat, reported SABC News.<\/p>\n
The power utility has also applied to the National Energy Regulator of South Africa (Nersa) to hike tariffs by 32% on 1 April 2023, and municipal debt isn\u2019t making the job any easier for Eskom.<\/p>\n
According to Daily Maverick, as of 31 July 2022, 96 out of 278 municipalities in South Africa were indebted to Eskom:<\/p>\n
| Province<\/th>\n | Total owed by municipalities<\/th>\n | No.\u00a0in debt<\/th>\n<\/tr>\n |
|---|---|---|
| Northern Cape<\/td>\n | R2 983 153 202<\/td>\n | 21<\/td>\n<\/tr>\n |
| Free State<\/td>\n | R16 753 639 773<\/td>\n | 16<\/td>\n<\/tr>\n |
| North West<\/td>\n | R3 385 887 130<\/td>\n | 11<\/td>\n<\/tr>\n |
| Eastern Cape<\/td>\n | R2 364 950 301<\/td>\n | 11<\/td>\n<\/tr>\n |
| Mpumalanga<\/td>\n | R14 167 394 658<\/td>\n | 10<\/td>\n<\/tr>\n |
| Gauteng<\/td>\n | R8 24 882 108<\/td>\n | 8<\/td>\n<\/tr>\n |
| KwaZulu-Natal<\/td>\n | R764 314 297<\/td>\n | 8<\/td>\n<\/tr>\n |
| Limpopo<\/td>\n | R1 062 095 447<\/td>\n | 6<\/td>\n<\/tr>\n |
| Western Cape<\/td>\n | R256 094 773<\/td>\n | 5<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n Together, these 96 municipalities owed R49,762,411,689 to the power utility.<\/p>\n Of the 16 municipalities in the Free State owing Eskom about R17 billion, the financially embattled Maluti-A-Phofung is the biggest culprit within the province, accounting for almost half of the debt at R6.7 billion.<\/p>\n Maluti-A-Phofung has been struggling to manage its electricity grid for years and is now signing the power supply back to Eskom, SABC News said.<\/p>\n \u201cWe are in the process of signing the distribution agency agreement with the government, and we\u2019re waiting for the date and place of signing from the deputy presidency,\u201d said Maluti-A-Phofung mayor Gilbert Mokotso.<\/p>\n However, municipalities \u2013 including Bloemfontein\u2019s Mangaung metro \u2013 say that the inability to service its debts is partly due to metros being forced to spend money that isn\u2019t in their budgets to repair infrastructure that has been damaged by load shedding.<\/p>\n \u201cLoad-shedding is damaging municipal infrastructure, which is costly to repair, and this is something Eskom has to consider,\u201d said Mangaung spokesperson Qondile Khedama.<\/p>\n Organisation Undoing Tax Abuse (OUTA) CEO Wayne Duvenhage says that the Free State\u2019s debt purely comes down to poor management.<\/p>\n “The Free State authorities say that they can\u2019t pay the debt, but they continue to pay themselves handsome salaries,\u201d said Duvenhage.<\/p>\n \u201cThe Free States salary costs, including counsellors and consultants, have increased by 146% in the last five years. Inflation, in contrast, was only increased by 55% over the same period,\u201d he added.<\/p>\n In regards to Khedama\u2019s maintenance budget argument, Duvenhage said that what\u2019s happening is they are throwing unqualified people at the problem.<\/p>\n \u201cThis results in consultants having to come in to fix the issue, and after both parties are paid, there\u2019s nothing left to settle on maintenance, and therefore, their creditors start to pile up,\u201d he said.<\/p>\n \u201cThis is a vicious cycle, and unless they fix the competence in these municipalities and get good fiscal hygiene in place, we will continue to see these municipalities spiral downwards,\u201d he added.<\/p>\n Eskom noted that Metsimaholo municipality is the only authority in the Free State that maintains a zero balance, while Setsoto municipality has honoured its current account, SABC News said.<\/p>\n Eskom said that municipal debt burdens the power utility\u2019s revenue streams, ultimately affecting service delivery.<\/p>\n \n |